April 20, 2024

How Kick Plans To Monetize Streaming In A Way Twitch Couldn’t

Since launching just a few months ago Kick has aggressively tried to capture a share of the massive live streaming market, often trying to capitalize on the rapidly increasing dissatisfaction with Twitch, the leading platform in the space. While the Amazon-owned Twitch is trying to finally become profitable with new policies that put more money in their pockets and less into streamers’, Kick is touting 95-5 revenue splits, offering multimillion-dollar non-exclusive deals and providing a platform with generally fewer restrictions on what content can appear. For streamers who can find success on Kick, it seems like the lucrative paradise Twitch once was.

But looming in the distance is the knowledge that eventually Kick is going to need to become profitable. In the early days almost every tech startup is going to run at a loss, some even continue this way for years, but eventually, someone needs to start making money and Kick is no exception.

“Kick is not currently profitable, and that is obviously no secret,” says Edward Craven, CEO at Kick. “Just like any startup, just like anyone trying to enter an extremely competitive industry, we understand that there is a cost you have to pay to enter. We’re willing to invest capital into trying to make those moves and trying to take what is already an extremely competitive piece of the market in a very highly competitive space. So that’s what we’re currently looking towards investing in. We look at this as a venture which we will start having to monetize, sort of somewhere between the 12 to 36 months mark.”

Many assume that Kick never really needs to make money, as it is closely linked to Stake.com, a crypto-based online casino that appears to bring in a lot of cash. With gambling allowed on Kick, but being banned on Twitch, it serves as an amazing advertisement for the casino with streamers broadcasting their betting on the site to thousands of viewers. In turn, that will put a lot of money into the pockets of people involved with both, including Craven who is a co-founder of Stake. But while the obvious synergy is there, and some early reports on Kick do directly link it to Stake, the people behind it maintain that there is no official relationship between the two.

“Kick exists completely separate to Stake in all regards,” says Craven. “We do share common shareholders, that’s no secret, such as myself. But Kick’s road to profitability will surely be without the support of any affiliated entities and through direct revenue.”

Craven also pointed out that xQc, who signed a two-year 100 million dollar deal with Kick last month and who has previously streamed himself gambling on Stake, has no contractual obligations to stream or promote Stake or any other entities Craven is tied to. That deal is only tied to Kick, if xQc then decides to promote Stake through gambling streams that is just an added bonus for the people involved with both.

So Kick needs to make money on its own, but doing so is not going to be easy. Kick’s video platform is licensed from Amazon Web Services, which explains why from a functionality point of view the two sites look nearly identical outside of the color scheme. While Craven says the AWS product is “industry leading” it does mean that Kick is effectively paying its main competitor, and is another significant expense.

Then there’s the 95-5 revenue splits for subscriptions on the platform for all partnered creators, a massive difference from the 50-50 split that is now standard for most streamers on Twitch, and the freedom to monetize their streams with any kind of sponsorship deals. For Kick these are key creator-focused policies that Craven says will not change anytime soon, but it certainly doesn’t help them in the eventual quest to make money.

“We [will] look heavily towards the advertising space as the place where we believe that Kick will see the most potential in revenue,” says Craven. “We don’t look at gifted subs or rather known as donations as being a revenue stream that we need to utilize. It isn’t something that we believe we have a right to a right to dip into when it comes to creators and their earnings. We will look towards advertising that’s no secret. We think that there are a lot of viable opportunities in advertising in order to turn a profit.”

Ads are no doubt a potentially lucrative business, which sustains a large portion of the internet. But when it comes to live streaming they are generally seen as more problematic compared to ads on other types of content. When something is live and an ad hits at an inopportune time viewers can miss key moments and leave them frustrated and annoyed with the platform. Similarly, if ads are shown before a person can watch a stream they may miss out on key content they were hoping to see. It’s not like watching a pre-recorded video that pauses for ads, ads directly cause fans to miss out on what they want to see.

Over on Twitch, many streamers run the minimum amount of ads allowed in their contracts, despite the potential to make more money by running more ads, to make sure their fans don’t miss out. Many top ad blockers advertise the ability to block ads on Twitch as a key feature (although they rarely work) and with Twitch increasing the price of its Turbo subscription service that removes all ads on the platform, there’s a good chance that in the coming months, even more people will become irritated by ads.

Craven didn’t go into specifics on how Kick will be rolling out its ads or how they will benefit streamers rather than annoy them and their viewers. That’s probably because it seems a lot of things are yet to be decided as the company is currently focused on rapid growth rather than monetization in its current state. If Kick wants to make a lot of money from ads, there are a lot of pitfalls it needs to avoid, but the team is confident that this is how they can make streaming financially viable for both them and the content creators.

“I personally believe that there is a very good chance that we can pull this off,” says Craven. “I think it’s the right time, it’s the right situation for us to be doing this. I think that in this given time, Twitch is starting to forget a little bit about what makes live streaming important and they’re starting to forget a little bit about the creators. And I think this has led to us having an absolutely perfect opportunity to appeal to the customers, to the viewers and to the content creators at a time when other platforms are not looking to do so.”

There’s no doubt that Kick is making waves in the streaming space and is already the most exciting competitor to Twitch in years, but if the goal is to make money from ads there is no guarantee that it will succeed in the long run. If Twitch hasn’t figured out a way to present ads without annoying the majority of viewers then Kick will have to come up with something special to make it work, although the goodwill they get from other revenue splits might help them.

Either way, competition is never a bad thing, and even if Kick fails the platform’s presence alone is playing a key part in the community’s battles against Twitch’s new policies that are designed to increase their profits. There’s no telling how this all plays out, but for the streamers, even those not on the platform, Kick’s existence can only be seen as a good thing.

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